Building Performance Standards 101
Let’s just acknowledge the elephant in the room. Building Performance Standards (“BPS”) are nebulous and scary. What do I have to do to comply? How much does it cost to comply? How much does it cost if I don’t comply or cannot achieve the needed efficiency? It all seems expensive and unknown. You know what is just as scary? The known, not nebulous thing: Climate Change. Climate change poses risks to all aspects of life, especially human beings and how we live. The EPA reported the Commercial and Residential sector was responsible for 30% of 2021 U.S. greenhouse gas emissions. We all want to be part of the solution that addresses that. Regulations such as Building Performance Standards (BPS) that require owners to comply with energy performance and emissions limits, or face financial consequences, are far better than accelerating our extinction. Plus, there is a bright side to BPS; the efficiencies we gain will improve our bottom line. Let’s dig in, dig deep and simplify the unclear so you can improve and secure your bottom line, contribute to saving our world, and ride the elephant.
What is BPS?
BPS are policies and regulations that aim to reduce greenhouse gas emissions and/or increase energy efficiency in existing buildings. As cities, counties, and states recognize the environmental impact of buildings, BPS is becoming more prevalent.
Where are BPS regulations in effect?
The National BPS Coalition consists of 46 jurisdictions (as of December 2023) that have committed to implementing BPS policies and programs into their jurisdictions. These jurisdictions are supported by various organizations and institutions through resources such as technical analysis, equity strategies, and policy design. Of 46 jurisdictions, 13 have already released BPS regulation with 33 intending to release regulation on Earth Day this year. These policies, at the city, county, and/or state levels, impact properties subject to one or more regulations. Properties with multiple buildings may have to report on BPS separately for each building.
Each BPS policy defines the buildings that are required to comply with the regulation. For example, Seattle requires all existing nonresidential and multifamily buildings greater than 20,000 square feet to comply. This policy oversees 1,885 multifamily properties!
BPS policies are not the only policies that may be impacting your buildings and properties. Benchmarking policies which require you to report your energy, water, and/or greenhouse gas emissions annually are also in effect in jurisdictions across the country. Some of these benchmarking policies even have additional components that are similar to a BPS policy, though not classified as one by the Institute for Market Transformation (IMT). An example is Los Angeles’ Existing Buildings Energy and Water Efficiency (EBEWE) Program which requires energy and water usage benchmarking annually in addition to audits and retro-commissioning to comply with the set standards.
How does BPS affect my property?
BPS policies aim to achieve a performance target set by the jurisdiction(s) the property falls under, often requiring annual whole building energy reporting and compliance with the performance target every five years (subject to policy). Failure to report and comply results in fines, which can accumulate significantly over time and vary by policy.
For example, Seattle has a Reporting Fine of $2,000 or $4,000 (depending on square footage) annually; and a Performance Fine of $2.50 (low-rent buildings) or $7.50 per square foot every five year interval. For a 100,000 square foot building, each year you fail to report you would be fined $4,000. And each time you don’t comply with the performance target, you would be fined $750,000. Over time or through multiple properties and buildings, you potentially have to pay millions of dollars in fines.
How do I know if my property is impacted and how do I avoid being fined?
Managing BPS policies can be confusing for property portfolios across the country and it’s likely that more jurisdictions will implement BPS policies in the future. Reporting and performance compliance often includes whole building water usage data and whole building energy usage data, including electricity and gas. Jurisdictions are using Energy Star Portfolio Manager to report this data and determine compliance, in addition to other reporting and verification requirements. These requirements can be difficult to fulfill, including common pain points such as:
Navigating the requirements for various BPS policies, often spanning an entire portfolio.
Managing each building’s performance through data collection and creating a plan for compliance.
Understanding the financial impact of BPS policy fines and the return on investment of implementing sustainable building upgrades.
While it may seem like a future problem, planning is essential to ensuring your properties and portfolio is compliant with BPS policy. It takes time to collect data and assess your properties, plan financially and operationally effective actions, and implement them to comply with performance standards.
GreenT Climate Software provides a streamlined solution to help you stay current on compliance requirements and manage risk. For more information, please contact us.